I am so excited to have with me here today the one and only, Damon Pistulka amazing, amazing South Dakotan. Wonderful human. Damon is the co-founder and managing director of Exit Your Way, a company that helps owners plan, prepare, and execute the sale of their business so they can exit with two times more money and a 90% success rate.
On today’s show, Damon and I are talking about riding motorcycles, his passion for business and helping small business owners, pivoting a $3 million dollar misadventure, proper business management, and admonishing business owners and manufacturers alike to see marketing as an investment. Marketing is farming!
Riding a motorcycle in the mountains. I don't have one now actually. But I'm looking around to get another one. I got an accident when my kids were young and I put it away. I borrowed one from a friend a couple months ago this fall and went out and rode again. I realized, yeah, I need one.
Nicole Donnelly: You know, when I was a kid, my dad had a motorcycle and every Sunday he would take me on rides. He’d drive me all the way up to the base of Mount Baldy, and I just loved those Sunday drives. It was so fun.
I'm an introvert. I am perfectly happy just being on my own.
Nicole Donnelly: Wow, that shocks me because you're such an incredible networker. How are such an incredible networker and be such an introvert? What's your secret?
I think my passion is what it does it. I mean, I love talking business and helping business owners. That to me is just so much fun. And I think that's what really drives me to networking and be out there talking to people.
I thought I was gonna graduate with an engineering degree and work as an engineer. Cause I really liked that work. Five years in, I realized that I'm pretty good at engineering, but I like people and managing and leading people more than anything. Once I realized that, it was like, man, that's what I wanted to do.
So, I was 28, 29 and the company I worked with was growing really quick but I soon realized that I was in a family business and I wasn't part of the family. I was like, okay, now what do I do? I lucked into a job that was really close to us and started to work in an investor-owned business with that had a bunch of Price Waterhouse Cooper owners. These people have been consulting all over the world.
They got me a mentor that was in house with me, two days a week for an entire year. They sent me to a finance school and together we took the company from the brink of bankruptcy to making millions of dollars a year. And it was just a blast. That's where I learned and was able to build a team of just phenomenal people; smart people that I love just seeing them blossom and taken on success.
Nicole Donnelly: That must be so rewarding to be able to see the impact of the time that you invested in those people.
It's incredible. It’s inspiring to me and makes me want to help more people.
This is why the introvert comes out and gets out of the shell because I've been able to help people. Leading people is really just about allowing them to find themselves in what they love to do. It's not just being there to support ‘em.
With that first company, from the beginning, we had the intention of building it and selling it. I was able to lead the team through selling the business. I got a lot of diligence and experience. At the end, I was like, this is what I want to do.
I want to do this. I want to help more people sell their business but knew I needed to do it on my own because I can be much more valuable to an organization when you're just focused on building value, preparing for sale and selling a business.
Nicole Donnelly: it sounds like you've really found a niche for yourself, which I think is so key for small businesses. You really have to really identify what it is that's your superpower. What it is that you're most passionate about and where is there a need in the market? There's a lot of emotion involved when selling a business. So, to have someone like you, who can really help navigate all that and make sure that it's positioned in the best way for success. I think that's awesome.
As entrepreneurs, we are constantly challenged to listen to the market, seeing the opportunity, and having to pivot.
We thought Exit Your Way would be about organically growing and selling. In the last two years, we learned business owners want to increase the value of their business in addition to preparing the sell. As a result, we have shifted to a growth by acquisition model.
So if you've got someone that has a manufacturing business in the electronics industry. They probably know other electronics manufacturers like them. I can call Nicole to see what Nicole's doing. Nicole's in the right age group. She might be thinking about retiring. Maybe I'll buy Nicole's company. We'll put 'em the businesses together, they’ll be a little bigger going forward which means more dollar a profit when you sell it.
Another way to look at this is, let’s say you have a $2 million a year revenue business. I can buy two or three of my competitors using SBA loans and now I'm a $5 million business. It's a win-win.
We were helping people with a lot of organic growth and getting great results. But over the last couple of years, helping people with acquisitions has becoming a big part of our business.
Nicole Donnelly: I think what you're saying speaks to entrepreneurs. We constantly have to be thinking about what the market needs now. What are the opportunities? How do I need to pivot? It never ends.
When people ask me this I say, I really can't remember 'em because it’s a part of the process. It's learning.
When you're a kid and you run too fast and fall down, you realize, maybe doing that wasn't so smart. When we started Exit Your Way, we started off with a pretty good bang and had some nice successes in the beginning.
There was a client we really enjoyed working with through the entire process - consulting, producing phenomenal results, and increasing value so much so value was significantly more than what the owner wanted originally. Within a couple weeks of signing the closing documents, a family member convinced the owners it wasn't a good decision.
This was a pretty big deal for us. It was over three quarters of a million dollars, and it went to nothing overnight, literally. What it taught us - no matter what appropriate contracts are needed, especially when the stakes are high, even if it’s your best friend. If something happens, you want to be able to walk away and talk about it later. We had to change our contracts to reflect that when we get to a certain point, if the client decides to follow through with the sell, they have to pay us as if we went through the process.
And of course, we didn't have our pipeline full.
It was empty as, bottom of Coke can.
So, we had to start over. We learned from it and now we do things a lot differently. Entrepreneurs, you're gonna get gut wrenching stuff.
If you're gonna be an entrepreneur, you better get back up because tomorrow you can get punched in the gut. Gwendolyn Greer, she talks about sales and about failures. You gotta get back up.
Nicole Donnelly: I feel as entrepreneurs, like you have to be reaching for something higher. Like you have to have a saga that you're, that's pulling you up. Because otherwise, if you're not, if there's, if that mission isn't strong enough for you and for your team. If they're not behind it, that when you get hit down hard enough, they're not gonna get back up.
The saga is important, for us. For me personally, it’s that I'm gonna help as many business owners as I can to overcome the disappointment of getting to the end of their business only to realize they've gotta close it down or have to sell a lower value because they didn't create something of value.
Don't get me wrong. Small businesses are not the only ones who find their business isn’t sellable. We had a $40 million a year client several years ago that we helped through that situation with four owners. Our team had to get the right people in place and help them transition so the business could be sold.
Nicole Donnelly: You do have to be always thinking about a succession plan.
Honestly, that's one of the biggest things we help clients with - having the appropriate management team, executive team, leadership in place prior to the sale and on the ground long enough to show they can do what they need to do.
What hasn't worked? Direct outreach. People don't want to be sold to.
When we started, we did direct outreach. However, in our kind of work, you get two kinds of people, desperate and price shoppers. They don't know you or they are either in a position, grasping for that last straw or trying to find something for nothing. Neither one of those are good.
What has worked is long-term relationship building. I think the key is building relationships with people that have one to many relationships with your type of clients. So for Exit Your Way, CPAs, lawyers, high level executive advisors are the people we seek. They recognize the value in what we do and we build relationship with them over time. It takes time to make progress.
Marketing is farming. It's not gonna happen overnight.
But I can tell you if you invest in those things and you invest hard and you put in the effort and do what you need to do, it returns in many ways. We get a lot of leads by talking to tons of people and it seems like the more we help people connect people, share information, share talented people, the more it comes back around.
Nicole Donnelly: Oh, that's so true. I love what you said too about finding partners that can kind of resell for you. I found that in my own business too. I have several partners that basically just bring business to me. It’s really great advice for a small business who want to be scrappy. Figure out who those affiliates are going to be for you that have similar services or see similar clients and need your ancillary services.
Nicole Donnelly: Marketing is absolutely a long game. It is not something that happens overnight, and you really do have to commit to building those relationships at scale. Small businesses need to think about how 80% of the purchasing process now is happening online. It's important to show up in the appropriate online channels. Finding one channel that business owners can really just go hard on, and really just knock it out is a good idea. Marketing is so complex and is if you try to do too many things all at once, it's setting you up for mediocrity. Great advice, Damon.
If you don't take big chances, you're not gonna get big results.
Yes, control your risk. Take calculated risks.
Don't jump in and spend, a million dollars on something without really knowing what the downside potential could be. Instead, think about what the upside potential could be. If the upside potential is a hundred million and you're only spending a million that isn’t going to put you out of business and has a good chance of succeeding, you got take the chance. Why not?
Marketing is a huge leap. I believe small companies need to invest significant amounts of money in marketing. Like you said, 80% of the buyers want to buy online. If you're not making it real easy for them to buy online, and get them to a purchasing decision by answering questions, giving them more information it’s going to take longer for you marketing strategy to pay off.
When I go back and look at people in the past that have been successful, like John Jantsch, the Duct Tape Marketing guy, they took the time to set up their systems to allow customers and people access services and products online.
Nicole Donnelly: You're absolutely right. I think it's all about scaling your sales team, right? Especially manufacturers who have traditionally have large sales teams doing outbound calling. Digital marketing and sales is now becoming this smarketing combo. Progressive companies understand the need to combine sales and marketing together. They understand the value of figuring out a way to scale the sales team online so that people are self-selecting, self-qualifying themselves.
Buyers today don't like talking to salespeople. They just wanna be able to make a purchase. They don't have to call you and talk to you about your product and services. You're building a relationship with them online by creating evergreen content that people can access at any time.
It’s a must for small businesses to be thinking about marketing as an investment. So often people see marketing as an expense. Business owners and manufacturers invest in capital equipment and should see marketing in the same way.
It's an investment in your company not just a line item that's an expense on your books
Damon Pistulka: Yes, they do.
They can find me on LinkedIn or come to our website, exityourway.com, exityourway.us, or exityourway.ca, if you're in Canada.
Damon, thank you so much. It's been a pleasure.
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ABOUT DAMON PSITULKA
Damon Pistulka is the Co-Founder and Managing Director of Exit Your Way. Exit Your Way® helps owners plan, prepare, and execute the sale of their business to exit with 2x+ with more $$$$ and a 90%+ success rate.
He started his career as a Mechanical Engineer and served as a consultant and Business Executive for several manufacturing businesses before Exit Your Way. Damon is passionate about baseball and has volunteered as Board President for a large local non-profit baseball organization.